Incidents:
On May 21, 2024, Xiaopeng Motor released its financial report for the first quarter of 2024: total 2024Q1 revenue was 6.55 billion yuan, up 62.3% year on year; net loss due to mother was 1.37 billion yuan, net loss for the same period in 2023 was 2.34 billion yuan; non-GAAP net loss was 1.41 billion yuan, which was 2.21 billion yuan. The loss narrowed; gross margin was 12.9%, up 11.2 pcts year on year, up 6.7 pct month on month. The company delivered 21,821 vehicles in 2024Q1, up 19.7% year over year.
Investment highlights:
2024Q1 net loss narrowed, and gross margin increased significantly. 2024Q1 achieved revenue of 6.55 billion yuan, of which vehicle revenue was +62.3%/-49.8% month-on-month, of which vehicle revenue was 5.54 billion yuan, +57.8%/-54.7% month-on-month. The year-on-year increase was mainly due to increased deliveries in the first quarter of 2024 (especially X9 models), and the month-on-month decrease was mainly due to reduced current deliveries of the G6 and 2024 G9 models and seasonal effects; service and other revenue was 1 billion yuan, +93.1%/+22.1% month-on-month. The increase mainly came from the Volkswagen Group Benefits of technology research and development services related to the platform's software technology cooperation. 2024Q1 lost 1.65 billion yuan in operating profit, with a loss margin of 36.3%/19.5%, net profit loss to mother of 1.37 billion yuan, a year-on-year narrowing of 41.5%, and basically flat month-on-month; gross margin was 12.9%, +11.2pct/month-on-month, +6.7pct, automobile gross profit margin of 5.5%, and +8pct/month-on-month.
Expenses: Sales and general management expenses were $1.39 billion, or +0.1%/-28.3% month-on-month. The month-on-month decline was mainly due to a reduction in franchisee commissions and marketing expenses; R&D expenses of 1.35 billion yuan, or +4.2%/+3.3% month-on-month. The increase was mainly due to new vehicle R&D projects. Gross margin increased significantly, exceeding our expectations, mainly due to reduced costs and improved model product portfolio.
Intelligent driving capabilities continue to improve, and a new product cycle has started. The company's smart driving technology continues to innovate, and product competitiveness continues to improve. In May, the company released the first large-scale end-to-end autonomous driving model for mass production in China, and the world's first AI chauffeur service. Chairman He Xiaopeng of the company said during the earnings conference call that starting in the third quarter of this year, the company will soon begin a cycle of launching more than 10 new products with strong shapes within three years, covering major market segments in the 10-400,000 yuan price range. It is expected that a new B-class pure electric sedan will be delivered in 2024Q4. The first A-class pure electric sedan under the second brand MONA will be released in June. Delivery of the 2024Q3 will begin, and the product matrix will continue to expand.
The sales service system has been upgraded, and business expectations are optimistic. As of March 31, 2024, the company has 574 sales stores, covering 178 cities across the country; Xiaopeng has 1,171 self-operated charging stations, including 359 S4 ultra-fast charging stations. 2024Q2's estimated delivery volume is 2.9w~3.2w, +25.0% ~ +37.9%/+32.9% ~ +46.6% YoY, total revenue of 7.5 billion yuan to 8.3 billion yuan, and +48.1% ~ +63.9%/+14.5% ~ +26.7% YoY.
The process of going out to sea continues to accelerate, and technical cooperation continues to advance. 1) The company's overseas expansion process was accelerated, and it was announced that it will enter markets such as Germany, France, Thailand, Singapore, Malaysia, Hong Kong, China, Macau, Australia, etc., and the overseas sales plan will expand to more than 20 countries and regions. 2) In April, an EEA electronic and electrical architecture technology strategic cooperation framework agreement was signed with Volkswagen Group. It is expected to be applied to Volkswagen brand electric models manufactured in China from 2026, and revenue is expected to be included in the second half of 2024.
The profit forecasting and investment rating company's gross margin improved to 12.9% in 2024Q1, doubling from month to month; a large model of end-to-end autonomous driving was released, and smart driving capabilities were further improved; and the new MONA model is expected to be released in 2024Q2. The company's main business revenue for 2024-2026 is estimated at 467, 82.1, and 99.1 billion yuan, with year-on-year growth rates of 52%, 76%, and 21%; achieving net profit to mother of -67, -2.1, and 900 million yuan. The corresponding EPS is -3.56, -1.13, and 0.48 yuan. The PS valuation corresponding to the current stock price is 1.3, 0.7, and 0.6 times, respectively, maintaining a “buy” rating.
Risks suggest that NEV sales are growing less than expected; competition in the automotive industry intensifies risks; the new vehicle development process falls short of expectations; competition in market segments increases risks; and the progress of intelligent development falls short of expectations.